Inflation Eases in May as Housing Prices and Rents Show Mixed Trends

Israel’s consumer price index fell 0.3% in May 2026 from April, according to the Central Bureau of Statistics. Even so, inflation over the past 12 months remained positive at 1.9%. The sharpest monthly declines were in transportation, down 2.7%, and furniture, while clothing, culture and housing posted increases.

The rental market remained under pressure. Tenants renewing leases paid 2.5% more, while new tenants faced a 6.8% jump in rent. At the same time, the construction input price index for residential building rose 0.6% in May and 3.5% over the past year, driven mainly by a 5.3% increase in labor costs in the sector.

Housing prices themselves, though not part of the general CPI, also declined. The housing price index fell 0.3% in the March-April 2026 period. By district, prices dropped sharply in Jerusalem, down 2.0%, and Haifa, down 1.9%, while the center and Tel Aviv saw slight increases.

On a yearly basis, apartment prices in Israel were down 1.3%, with new homes falling even more steeply, by 3.9%. The annual pattern showed declines in the center, Tel Aviv, Haifa and the south, alongside increases in the north and Jerusalem.